The Pennant Group (NASDAQ:PNTG) vs. Covalon Technologies (NASDAQ:CVALF) Financial Analysis

The Pennant Group (NASDAQ:PNTG) and Covalon Technologies (OTCMKTS:CVALF) are both small-cap medical companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, institutional ownership, valuation, analyst recommendations, risk, profitability and earnings.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for The Pennant Group and Covalon Technologies, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Pennant Group 0 2 1 0 2.33
Covalon Technologies 0 0 0 0 N/A

The Pennant Group presently has a consensus price target of $34.50, suggesting a potential downside of 11.27%. Given The Pennant Group’s higher possible upside, equities research analysts clearly believe The Pennant Group is more favorable than Covalon Technologies.

Earnings & Valuation

This table compares The Pennant Group and Covalon Technologies’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
The Pennant Group $338.53 million 3.21 $2.55 million $0.52 74.77
Covalon Technologies $25.61 million 0.81 -$6.88 million N/A N/A

The Pennant Group has higher revenue and earnings than Covalon Technologies.

Institutional & Insider Ownership

80.4% of The Pennant Group shares are held by institutional investors. 10.4% of The Pennant Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares The Pennant Group and Covalon Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Pennant Group 1.39% 22.16% 4.00%
Covalon Technologies -31.61% -64.32% -21.48%

Summary

The Pennant Group beats Covalon Technologies on 11 of the 11 factors compared between the two stocks.

About The Pennant Group

The Pennant Group, Inc. provides healthcare services in Arizona, California, Colorado, Idaho, Iowa, Montana, Nevada, Oklahoma, Oregon, Texas, Utah, Washington, Wisconsin, and Wyoming. It operates in two segments, Home Health and Hospice Services, and Senior Living Services. The company offers home health services, including clinical services, such as nursing, speech, occupational and physical therapy, medical social work, and home health aide services; and hospice services comprising clinical care, education, counseling, and palliative services for the physical, spiritual, and psychosocial needs of terminally ill patients and their families. It also provides senior living services, such as residential accommodations, activities, and meals, as well as housekeeping and assistance in the activities of daily living to seniors, who are independent or who require some support. As of July 01, 2020, the company operated 71 home health and hospice agencies; and 53 senior living communities. The Pennant Group, Inc. was founded in 2019 and is headquartered in Eagle, Idaho.

About Covalon Technologies

Covalon Technologies Ltd. researches, develops, manufactures, commercializes, and licenses medical technologies and products in the United States, Canada, Europe, the Middle East, Asia, Latin America, and internationally. The company has three platform technologies, including collagen matrix platform that is used to manufacture a family of products that treat chronic and infected wounds, such as diabetic ulcers, pressure ulcers, venous ulcers, donor and graft sites, traumatic wounds healing by secondary intention, dehisced surgical wounds, and first and second degree burns; antimicrobial silicone adhesive platform, which is used in a family of pre and post-surgical, and vascular access products that are designed to kill bacteria or yeast that comes into contact with the antimicrobial silicone; and medical coating platform, a proprietary process that utilizes photo-polymerization to create active grafting sites where new polymer chains are initiated and propagated from the surface of an existing medical device. It sells wound care dressing, surgical and peri-operative, and infection management products under the Covalon brand name. The company also offers development contracts, licensing agreements, and distribution contracts services. It provides its technologies, products, and services to various health care providers, such as hospitals, wound care centers, burn centers, extended/alternate care and acute care facilities, home health care agencies, and physicians' offices. The company is headquartered in Mississauga, Canada.

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